Volkswagen Considers Closing German Factories to Further Cut Costs
Recently, media reports revealed that Volkswagen issued a statement on September 2, considering the closure of German factories to further cut costs. This plan includes shutting down a major car manufacturing plant and a parts factory, affecting Volkswagen Group's major passenger car brands. This would mark the first time Volkswagen has closed a German factory in its 87-year history.
Volkswagen CEO Oliver Blume stated, "The economic environment has become more challenging, new players are entering Europe, and Germany is falling further behind in competitiveness as a business location."
The statement also mentioned the intention to try to terminate the agreement with the union that ensures employment stability until 2029, which may lead to conflicts between the company and the union. The chairman of the Works Committee criticized management for its performance.
Volkswagen Group's financial report for the first quarter of this year showed that sales reached €75.5 billion, a 1% year-on-year decrease; operating profit was €4.6 billion, down 20% year-on-year; and global sales totaled 2.1 million units, a 2% year-on-year decrease. The second-quarter financial report indicated that revenue increased to €83.34 billion, up 4.1% year-on-year; operating profit decreased to €5.46 billion, down 2.4% year-on-year; global sales were 2.244 million vehicles, a 3.8% year-on-year decrease; and vehicles delivered in the first half of the year totaled 4.348 million, a 0.6% year-on-year decrease.
The overall performance in the financial reports for the two quarters was average, particularly concerning operating profit. Volkswagen Group's underwhelming performance in the first half of the year may be a factor driving its cost-cutting measures.